Using Facebook to Find Your Most Profitable Customers [Case Study]

Last week Nielsen analyzed and published an online advertising case study that underscores (1) the unprecedented (and guaranteed) targeting available when advertising on Facebook and (2) the importance of measuring beyond the click through of an ad.

The case study centered on an online advertising campaign for a CPG geared toward women aged 25-54. Ads were deployed across three ad networks and one women’s interest site; however, only 27% of the time did the campaign in fact reach that intended audience! Worse yet, Nielsen found that purchase consideration was barely impacted by the campaign. (MediaPost followed up with an article highlighting the disconnect: Nielsen Finds No Relationship Between Clicks and Sales.)

This particular ad campaign did not run on Facebook, where the CPG could have guaranteed it reached its intended audience of women aged 25-54 100% of the time. More important, our own case study of a leading online men’s retailer echos Nielsen’s findings around there being little relationship between ad clicks and sales:

As you can see from the graph above, a higher clickthrough rate does not necessarily correlate to a higher purchase rate.

As we implemented targeting on Facebook from more general (location) to more specific (personal), purchase rates increased by a multiple of 4. With these learnings, our Ad Engine deployed a much larger portion of our advertising partner’s budget to this audience, which had a much higher propensity to purchase. Had we only measured and focused on the click though rate, however, we would have deployed that budget to a different audience (using contextual targeting) — and in doing so, not maximize the ROI potential of the ad campaign.

The case study demonstrate why we built our social ad optimization technology from the ground-up to measure beyond the clickthrough to actual user engagement. Whether it’s an e-commerce company optimizing for add-to-cart engagement and purchase events, or an application developer optimizing for tutorial completions or viral referrals — our technology empowers our advertising partners with the metrics that matter.